What is a property chain and how can you manage it?

Find out what a property chain is and what happens if it breaks. 

What is a property chain?

A property chain is where a group of home buyers and sellers are connected. If you want to buy a house but first have to wait until the seller buys their next home, you’re in a property chain.  

If you’re in a property chain, this can mean that moving house could take longer or is more complicated. The more people in a chain, the more likely it is that something can go wrong. When this happens, the purchase or sale of a property may fall through. 

How does a property chain work?

A property chain is formed when a group of property buyers and sellers are linked together because their purchase or sale depends on another somewhere along the chain.

A typical property chain may look something like this: 

  • First-time buyer – At the start of the chain. This person isn’t selling a home, only buying
  • Homeowner – Selling their home to the first-time buyer and purchasing a new home from a retiree
  • Retiree – Selling their home to the homeowner and moving in with family

This is a two-person chain, as there are two house purchases that need to take place.  

Chain-free property

A chain-free property is one that doesn’t rely on any other transactions to happen before its sale or purchase can go through. This can also be called a property with no onward chain.

Some common examples of chain-free properties include:

  • First-time buyers purchasing a new build
  • Moving in with family or friends once you’ve sold your home
  • Buying a vacant or repossessed property
  • Part-exchanging your current property to a developer

Property chain collapse

If a sale falls through, it can affect everyone in the chain. This means you could lose money you’ve already invested in your house purchase. You may also have to put your property back on the market and lose out on your dream home, which can be stressful and disappointing.

Some reasons a chain may break are: 

  • Someone changes their mind about buying or selling
  • A mortgage application is rejected
  • A solicitor, estate agent or legal firm takes too long to process the paperwork
  • A property survey shows costly or dangerous problems

Communication is key to avoid a broken chain. Speak to your solicitor or estate agent for regular updates. 

It also helps to get everything in order early on, such as your deposit, mortgage agreement in principle and any necessary paperwork.

  • What can you do when a property chain breaks?

    Sadly, most property chain breaks will be out of your control, such as when another buyer pulls out of the sale. However, there are ways you can protect your home and money. 

    If you have Home Buyers’ Protection insurance, you can claim back some of the money you’ve lost in fees if your house sale falls through.

    Some estate agents may also offer a guaranteed sale. This means they’ll buy the property from you if they fail to sell it in a set timeframe.

    What does no onward chain mean?

    No onward chain means the seller is not buying another property or their sale has already gone through.

    This can be a good alternative to no-chain properties, as you won’t have anyone above you in the chain who could affect your purchase.  

    How long can a house chain take?

    A house chain can take a few months to reach completion, depending on how many parties are involved. Generally, the longer the chain, the longer it will be until you get the keys to your new home.

The content on this page is for reference and does not constitute financial advice. For impartial financial advice, we recommend government bodies like MoneyHelper.

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